Articles

Death by Measurement.

In the 1980’s a business consulting mantra took hold around the world. ‘You become what you measure’ was the mantra, spawned and propagated by the ‘ultra dry’ rationalists of academia and a research and measurement industry salivating at the thought of the rivers of gold. Thirty years later we have a sea of businesses around the world that are world class at measuring lots of stuff – but not really very good at doing anything because of the burden of audit and measurement. In some cases technocratic retailers have even become what they measured and in the process lost all sense of empathy and insight.

The problem with human beings is that we can’t help but over-complicate things and we find it hard to resist change for change sake – especially when we can stamp our own ego on it somehow. We also have a nasty habit of needing to know ‘stuff’ and wanting to view everything from a highly rational viewpoint from which reward follows a linear outcome. Measurement fits this natural inclination too well.

21st century retail businesses have become – in many instances – too complex, produce too much information and take too much organizational resource doing it and are not focused enough on what really drives sustainable health, in the process becoming formulaic. A situation that will not prepare 21st century high street retailers to compete well against the growing presence of e-commerce in the future.

And yet the attributes of successful retail leaders around the world are surprisingly similar. A simple business model well executed. A clearly understood and magnetic customer value proposition, supported by all stakeholders. A set of organizational key performance indicators – that fits on one page. The abhorrence of masses of data. The worship of insight that leads to action. A culture attuned to the enhancement of human engagement at the point of sale.

Up until the 1980’s customer relationship management practices in leading apparel retailers for example, trained store managers to keep a customer journal of their regular customer’s tastes and desires. This was before computer technology changed the game and made it about databases rather than relationships. I find it amazing how many leading retailers around the world have encouraged their staff to rediscover the effectiveness of a hand-written customer journal to great success.

What worked in retail 30 years ago – before the advent of technology, complexity and a monosyllabic corporate culture of data to the exclusion of all else – is what will always make physical retail prosper and grow. Yes we need to measure. But the art is to determine the minimum amount of measurement that will create the maximum amount of insight leading to sustainable productivity growth in an industry that is increasingly rediscovering the power of relationships.

It isn’t about the data. It is about the people. People need guidance. People need feedback. But not so they can improve the results in the data. So they can improve the relationships and through the strongest and most relevant relationships, profit.